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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 15660
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Sole Trader help

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I have a few questions regarding myself being a sole trader...

In 2009 I was made redundant from company X. Later that year I did some on off work for them as a Sole Trader. Fixed fee, and literally a day here, few hours there for 4-5 months before the work started picking up. I largely worked from home and provided my own computer. My role had changed from the service I used to provide as a PAYE.
During that year I also completed 2 jobs for other clients.

Since 2010-to present date I have been working for this client regularly however providing the new service mentioned above. I provide my own resources, work from home when I must, hire a few helpers when needed (explained below)
I also use a workstation of theirs when convenient. During this period I have also worked for 4-5 other clients. I also have my own website etc. Are there any issues with this arrangement?

On occasion I hire 2 other people to help me out with comnpany X and other clients. This might be 2-4 days work in one go. It's not regular. Maybe 2-3 days every 2-3 months. Would HRMC view them as employee's and therefore I should pay their NI etc? One of them is a full time sole trader whilst the other is Employed and does extra work outside his contract.

One of the above people that I have hired has also provided me with some work, is this an issue?

Also, I have just realized I made a mistake on an old tax return. I put a computer and 2-3 other smaller items as an expense instead of a Capital Expense, which now I know about. What should I do about this?

Thank you,


Can you tell me what the nature of your work is please. Which tax return did you make a mistake on?
Customer: replied 3 years ago.

I am a 3D artist, so similar to a graphic designer.


It was the tax year 2010-2011


Leave this with me while I draft my answer.
As far as the errors on the tax return are concerned, you would have been able to claim a 100% deduction under the Annual Investment Allowance rules (read about those here) which is effectively the same as what you have done by claiming the costs as regular expenses. If I were you, I'd let sleeping dogs lie.

As far as your tax status is concerned, you are self-employed in my opinion notwithstanding the fact that you use a workstation at your "employer's" for the sake of convenience on occasion. Working for other clients, having your own website to attract clients and employing sub-contractors to assist you adds to your status as an independent contractor. You should issue invoices for your fees and keep control of your work schedule as much as possible.

The people you use from time to time to assist you are self-employed sub-contractors too in my opinion. The irregular use of their services helps with that claim. Getting work through one of them would not harm your contractor/sub-contractor relationship. They should sort out their own tax and NI responsibilities.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.

Hi Tony,


Thank you for your advice. Should HRMC decide to investigate my tax return what would the likely outcome be? I guess a penalty for getting it wrong, and any small tax difference given that had I used AIA in the first place the same/similar tax deduction would have taken place?


With regards XXXXX XXXXX workstation I use company X's regularly but along with my own in equal measure. I also subscribe to a couple of online resources for stock imagery I need to use.


I was more worried given the duration I have been working with them which is almost on a 9-5 basis since 2010 with other clients work in and around it.


Yes the other two guys I work with do pay their own taxes etc. We all quote and invoice each other as and when etc.


One last question for you, with regards XXXXX XXXXX train expenses 24 month rule....


As mentioned I worked sporadically for company X in 2009-2010. Which meant I had to get a train to their office, mainly to pick up a brief or work at their office for a few hours.

However tax years 2010-2011, 2011-2012 I trained regularly into their office (24 months)

So I shouldn't claim any train expenses for 2012-2013 for that client?

Thanks heaps,



HMRC are out of time to investigate your 2011 tax return unless they find a similar mistake in a later tax return and use that to open up earlier years. It was a mistake many taxpayers make as they don't necessarily appreciate the difference between different types of expenses. It really won't be a problem.

You cannot normally claim the costs of travelling from home to a fixed place of work whether you are employed or self-employed. If you are effectively working a 9 to 5 routine, that's not good and a claim for travel expenses may be disallowed if your tax return was investigated with the earlier returns also being at risk. I realise that your former employer is probably your largest client in terms of fees but you need to make your routine less like that of a 9 to 5 employee. The fact that your subcontractors help with your work for company X is a plus point.
Customer: replied 3 years ago.

Hi Tony


Thanks for the great help.


So just to confirm the 24 month rule only applies if I was to work there temporarily? There have been breaks in between where by I may work at home for 1 week then travel in the next etc.


In which case I will not claim any further travel expenses to this client.


Thank you.





Take a look at the notes on the 24 month rule here. Have a think about it in relation to your work pattern and try to decide if you fall foul of the 40% rule.
Tony Tax and other UK Tax Specialists are ready to help you
Customer: replied 3 years ago.
Hi Tony,

I followed up on our chat with a call to Qudos contracting today.
They advised that the 24 month rule didn't apply to me being that Im a sole trader, not an umbrella, paye or ltd company. The chap I spoke with said its because I am not an employee of my company, I am the company.

Is this so?

You aren't "the company", you are a sole trader. The 24 month rule does not apply to you. It applies to employees.

However, if a sole trader, a solicitor for example, works from an office which is not in his home, he has a fixed place of work and so the cost of travel to the office and back home again are not tax deductible. If you only worked one week in two at the client office, that doesn't make it a fixed place of work in my book buit the easiest way to deal with it is not to claim the travel expense if it concerns you that much.

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